ICBC : Industrial and Commercial Bank of China (1398)

[CY09]

I am a believer of China stocks, but I have much caution. If I were to answer your question, I feel you should hold on to China SOEs to continue your perpetual stream of dividends. Banks and Oil majors are averaging 7-8% yield and that is an immense yield based on current climate. Its very possible to build a FIRE income based on the china SOEs on only a $1 million portfolio.

On the topic of carry trade, I have seen individuals who has utilised the strong Sing Dollar and weak SG interest environment to borrow SGD and buy HKD SOE shares. The outcome is that it has been an immensely profitable trade, as compared to the conventional borrowing in SORA (at 4.8% interest) and buying Mapletree REITs and other SG REITs (which yields 5+%)

In terms of banking industry in China, it is difficult for the 4 largest SOEs to collapse because of its implications and they are of better balance sheet strength

Just be careful of any policy switches by the communist government. Nevertheless the beat down in China share prices are too good in my view. I may suffer one-two years of no dividend but the chinese government is unlikely to throw cold water that the animal spirit suddenly freezes up.

<vested in Alibaba and Petrochina>

[dreamybear]

I am a believer of China stocks, but I have much caution. If I were to answer your question, I feel you should hold on to China SOEs to continue your perpetual stream of dividends. Banks and Oil majors are averaging 7-8% yield and that is an immense yield based on current climate. Its very possible to build a FIRE income based on the china SOEs on only a $1 million portfolio.

On the topic of carry trade, I have seen individuals who has utilised the strong Sing Dollar and weak SG interest environment to borrow SGD and buy HKD SOE shares. The outcome is that it has been an immensely profitable trade, as compared to the conventional borrowing in SORA (at 4.8% interest) and buying Mapletree REITs and other SG REITs (which yields 5+%)

In terms of banking industry in China, it is difficult for the 4 largest SOEs to collapse because of its implications and they are of better balance sheet strength

Just be careful of any policy switches by the communist government. Nevertheless the beat down in China share prices are too good in my view. I may suffer one-two years of no dividend but the chinese government is unlikely to throw cold water that the animal spirit suddenly freezes up.

<vested in Alibaba and Petrochina>

Thanks for your views. 

Yes, my fav/ideal holding period for my China bank stocks is still forever (although need to monitor closely coz things can change rapidly in this world). At the same time given the recent rally, I am also very tempted to "sell high" now and hope to "buy lower" later, although such strategies usually end up in nightmares rather than sweet dreams for me.

I think the arbitrage strategy you mentioned is interesting. However, if you don't mind sharing in detail, how does a Singaporean OPMI execute it ? According to https://www.moomoo.com/us/pricing, the interest for margin financing is almost 7% onwards. This is close to the dividend yields of some of the HK stocks after tax.

Regarding the point on FIRE, yes, a S$1million worth of HK stocks with 7% yield net after tax/associated costs, reaps an investor S$70,000 a year. That is almost the median income in SG !

https://smartwealth.sg/average-income-salary-singapore/ 
"The average median income (inclusive of employer CPF contributions) in Singapore is $5,197/month ($62,364/year). This equates to US$3,850/month or US$46,200/year"

[CY09]

Traditional brokerage allows borrowing in SGD, converting to another currency in a multi currency margin facility.

So it's borrowing in JPY or SGD facility and then converting to HKD/USD/GBP for overseas stock purchase